Young entrepreneurs in the Master of International Development Policy (MIDP) program joined with officials from the World Bank on Friday, Feb. 24 to discuss what is being done to encourage the efforts of entrepreneurs worldwide.
Drilona Emrullahu of Kosovo, Gonzalo Pertile of Uruguay, and Techa Beaumont of Australia began by sharing the challenges they have faced starting their own businesses and nonprofits.
Emrullahu founded her consulting business, RTC Consulting, in 2009 to promote private sector development, local governance, education and gender equality in her home country.
“One challenge I’ve faced is tapping into the right human capital,” she said. “Kosovo is a small country and our education system does not really provide young students with the right skills and knowledge that the private sector and business environment require.”
She also touched on the discrimination she has faced as a woman entrepreneur.
“As open as Kosovo has been, you still see a lot of divisions in the way people perceive women in powerful positions.”
Pertile discussed The Mayan Store, a business he co-founded to give artisans in Guatemala a chance to market their handicrafts and thereby preserve their cultural heritage.
“A huge challenge was taking professional companies here in the U.S. … and linking them with artisans in the informal sector,” he said. “It’s hard to train these artisans to the standards of international companies, such as meeting deadlines and complying with international laws.”
Beaumont’s nonprofit, Kulchajam, has initiated a range of entrepreneurial initiatives in the creative industries such as indigenous cultural festivals, cooperatives and creative incubators. As an entrepreneur, Beaumont said she often feels immobilized by red tape.
“The lessons I took from this was about relationships, linkages, and not taking ‘no’ for an answer,” she said.
The event, sponsored by the Duke Center for International Development (DCID), also showcased the work of five other MIDP entrepreneurs representing countries in Africa, South America and the Middle East.
Doing Business better
Melissa Johns, development economics advisor for the World Bank and graduate of the Sanford School of Public Policy, shared highlights of the World Bank’s Doing Business report and how it sheds light on ways countries can improve their support for entrepreneurs.
“It is our mission to help governments – our clients – create opportunities for people with good ideas so they can succeed,” Johns said.
The report measures different aspects of each country’s business environment, such as the ease of registering a business, paying taxes, enforcing contracts, trading across borders and getting access to credit.
Overall, she noted, countries are steadily improving their climates for new businesses. More than 75 percent of reforms in 2015/16 were implemented in developing countries, with 80 regulatory reforms put in place in sub-Saharan Africa alone in the last year. Perhaps most importantly, the gap is narrowing between the lowest and highest performing countries.
Peru, which recently reformed its property registration process, moved up a slot to 37th worldwide in this particular indicator over the past year.
“The government itself completes many of the information sharing that [other countries] require the entrepreneur or landholder to do,” she said. “Different agencies talk to each other instead of making the user go from desk to desk, which also eliminates opportunities for corruption.”
Not all countries are improving, Johns said. The United States, ranked eighth in the world for ease of doing business in 2017, slipped from seventh place in 2016 due to lack of reform.
She noted that even the strongest countries have room for improvement. New Zealand, the highest ranked country, only gets a B+ on the scale used by the World Bank. As a rule, the countries at the top of the list had several traits in common.
“These are countries that are well known for their social safety nets, transparency, simplicity of bureaucracy and strong regulation,” Johns said.
Finding a balance
After the success of the Doing Business indicators, the World Bank decided to focus on several specific economic sectors to evaluate their performance. One of these was agriculture.
The Bank launched the Enabling the Business of Agriculture program in 2013 to identify, measure and compare agribusiness regulations around the world. It currently evaluates 62 countries and plans to scale up to 80 countries next year.
Program Manager Federica Saliola said that one of the things they look for is balanced policy.
“We don’t want to advocate for too much deregulation because we want to see certain quality control in place,” she said. “At the same time, if a company wants to register, it shouldn’t take a year.”
A surprising finding of their research was that regulation and efficiency actually go hand in hand.
“There’s a prevailing idea that if you want a good regulatory legal environment in place, you have to be prepared for inefficiency. This is just not true,” she said. “Where regulations are better, there are lower costs and processes take less time.”
Following the discussion, DCID Director Indermit Gill thanked the participants and reiterated the critical role the Doing Business indicators play in showing countries where they can improve.
“They give an impetus to start moving,” he said. “But to know where to move, countries need to go deeper.”